Tezos Whitepaper - Self Amending Cryptographic Ledger

Tezos is a decentralized blockchain that governs itself by establishing a true digital commonwealth.
What’s more, Tezos was built to facilitate formal verification, a technique which boosts the security of the most sensitive or financially weighted smart contracts by mathematically proving the correctness of the code governing transactions.

The Tezos blockchain will underpin secure, decentralized applications and smart contracts while avoiding some of the political and technological problems which earlier efforts such as Bitcoin and Ethereum have faced. Tezos was built on the belief that a deep commitment to security, formal verification, and governance that gives stakeholders the power to make protocol decisions is the formula for earning trust and generating widespread adoption on the blockchain.

The slidedeck document provides a comprehensive overview of Tezos, its applications and benefits, the developers involved in the project, the upcoming Tezos fundraiser, the Tezos Foundation and the goals the Foundation hopes to achieve.

Work on Tezos began in 2014 by its founding development team, whose academic experience spans from philosophy to physics, mathematics and computer science, along with professional experience that includes positions at Goldman Sachs, Morgan Stanley, The Wall Street Journal, and Accenture. They recognized that decentralized blockchains share the same challenges that exist in any commons (the name economists give to a resource shared by several people), specifically that challenges around governance and maintenance often lead to stagnation, shortages, and political deadlock.

In the case of pioneers like Bitcoin and Ethereum, those challenges have manifested themselves in situations that put too much power in the hands of core development teams or miners. In other words, first-generation blockchains have become subject to a form of centralization that their developers sought to avoid.

During three years of development, the Tezos team sought to address the need for decentralized innovation in protocol design and emphasized the importance of formal verification in its software design philosophy.

Position Paper
The popularization of Bitcoin, a decentralized cryptocurrency has inspired the production of several alternative, or “alt”, currencies. Ethereum, CryptoNote, and Zerocash all represent unique contributions to the cryptocurrency space. Although most alt currencies harbor their own source of innovation, they have no means of adopting the innovations of other currencies which may succeed them. We aim to remedy the potential for atrophied evolution in the cryptocurrency space by presenting Tezos, a generic and self-amending cryptoledger.

Tezos can instantiate any blockchain based protocol. Its seed protocol specifies a procedure for stakeholders to approve amendments to the protocol, including amendments to the amendment procedure itself. Upgrades to Tezos are staged through a testing environment to allow stakeholders to recall potentially problematic amendments.

The philosophy of Tezos is inspired by Peter Suber’s Nomic, a game built around a fully introspective set of rules.

In this paper, we hope to elucidate the potential benefits of Tezos, our choice to implement as a proof-of-stake system, and our choice to write it in OCaml.

Whitepaper
We present Tezos, a generic and self-amending cryptoledger. Tezos can instantiate any blockchain based ledger. The operations of a regular blockchain are implemented as a purely functional module abstracted into a shell responsible for network operations. Bitcoin, Ethereum, Cryptonote, etc. can all be represented within Tezos by implementing the proper interface to the network layer.

Most importantly, Tezos supports meta upgrades: the protocols can evolve by amending their own code. To achieve this, Tezos begins with a seed protocol defining a procedure for stakeholders to approve amendments to the protocol, including amendments to the voting procedure itself. This is not unlike philosopher Peter Suber’s Nomic, a game built around a fully introspective set of rules.

In addition, Tezos’s seed protocol is based on a pure proof-of-stake system and supports Turing complete smart contracts. Tezos is implemented in OCaml, a powerful functional programming language offering speed, an unambiguous syntax and semantic, and an ecosystem making Tezos a good candidate for formal proofs of correctness.

Familiarity with the Bitcoin protocol and basic cryptographic primitives are assumed in the rest of this paper.